Before we examine what to do, let’s first take a look at your current situation. Is this truly a one-time occurrence, or do you keep getting stuck? If this is a regular situation, you need to take a broader view on how to avoid this pattern. You will need to brush up your financial skills, take an honest look at your expenses and income, and set a realistic budget. Include in your budget an emergency fund for these tight spots, and set aside money for car repair, medical care, and other sudden and unexpected expenses.
But in this case you do have an expense coming up, and you don’t have the funds to cover it. You can’t borrow from your family, your overtime didn’t come through, and you don’t have enough money on hand. Now what? You can take a short-term loan or MicroCredit advance from a responsible lender.
How do you choose who to borrow from? Here are some suggestions:
- Go to a lender with a physical storefront. Online lenders are more expensive, and you can’t talk face-to-face with a real person. Nor do you have the security of knowing where they do business.
- Research and be clear on the company’s lending policies. These should be available online, or in their location. Read the policies carefully, so you know what is expected of you.
- Is the lender a member of an overseeing, responsible financial association? For example, PayDayHawaii is a member of the Financial Service Providers of Hawaii association. You can read the business and lending standards we abide by here.
- Do some checking on the company. Google them to see if any complaints pop up, or check them through the Better Business Bureau, where you’ll be able to see if they are properly licensed and if any complaints have been lodged against them.
Be a responsible borrower:
- Learn how to be a responsible saver. We offer savings tips and tax advice here.
- Take out an advance only for the amount you absolutely need. I know it’s tempting to get a little extra, but this is not a “treat yourself” situation. This is a “making ends meet” situation.
- Make sure you have a plan to repay the advance promptly. If you are just waiting for a check to arrive, then fine. But if you have to request overtime, or get some extra work, start planning that now.
What if you get stuck and have trouble paying back your advance?
- If you have to renew your advance, don’t do it more than once or twice. Those charges start adding up!
- Talk to your lender! Work out a payment plan, and discuss your options. At PayDayHawaii, we are here to make this a successful transaction for you—not to drive you into the ground. Stop in at any of our locations and talk to one of our customer service representatives—we want to help you!
- Don’t take more advances from additional lenders. If you can’t pay back your first advance then you’re simply digging yourself a hole you can’t get out of by taking out multiple advances. You should know that in Hawaii it is illegal to have more than one open cash advance. If your lender offers to give you more than one advance at a time, they are breaking the law.
- If you have to, get another short-term, part-time job to pay off your debt. Depending on your skills and equipment, you could do additional handyman work, housecleaning, childcare, driving, etc. Check the Part-time and Gigs sections on craigslist Hawaii. If you have a computer at home, sign up for Amazon Mechanical Turk, an online site for task work suited to your specific skill. And talk to your friends and family—someone may have a one-time job they need help with.
Short-term and MicroCredit advances and short-term loans are just that—loans for a short period of time. They shouldn’t be used as an income substitute. They are convenient and easy, but you will pay a fee for that convenience. Remember to manage your loan fees so that you don’t pay any more than you absolutely need to.
Questions? Come in to any of our locations and we can walk you through the process. We’re here to help!
